On the occasion the Vietnam Entrepreneurs Day (October 13), Vietnam Business Forum has an interview with Mr Nguyen Van Can, General Director of the General Department of Vietnam Customs, on customs reforms in favour of businesses, as well as solutions to raise State budget collection. Le Hien reports.
Could you please tell us the most remarkable customs reforms for the recent development of the business community?
One of the most notable results is the perfection of the customs law system when Customs Law 54/2014/QH13 came into force to provide a completely new regulatory foundation for customs operations. To date, the customs service has abolished 84 administrative procedures and replaced 128 administrative procedures, while simplifying several customs documents. The Law on Export Tax and Import Tax 107/2016/QH13 has created a legal basis for further international integration and stimulated production development and export promotion.
But, the clearest impression of the customs sector that the business community can see is the successful deployment of e-customs procedures, with the centre being VNACCS/VCIS system, which has created breakthroughs in customs modernisation. Electronic customs procedures are carried out in all customs units (over 99.53 per cent of companies use e-customs and 99.32 per cent of export and import values are electronically implemented.) The highly automated centralised data processing system of the General Department of Customs reduces the declaration time to only three seconds. Green-flowed tax-free commodities need only four seconds to be cleared.
As of September 2016, the General Department of Customs had connected with 30 banks to collect taxes via electronic media, which account for over 90 per cent of State budget incomes.
With electronic customs procedures and VNACS/VCIS automated customs clearance system, the National Single Window (NSW) has been launched since late 2014. To date, the NSW has officially connected with 10 ministries. Since September 22, 2016, in addition to customs clearance procedures (provided by the Ministry of Finance), 36 administrative procedures provided by nine other ministries have been executed via the NSW. The NSW has processed over 170,000 sets of records filed by 7,680 companies. Priority mode has also formally applied. At present, 53 companies are certified priority companies (accounting for over 22 per cent of total export and import value).
Would you talk about the pressures for sustainable budgetary incomes on the customs sector, as a series of multilateral and bilateral trade agreements take effect?
Vietnam has to date signed 12 free trade agreements (FTAs) with 56 countries and economies in the world. Specifically, 10 FTAs have been ratified and two are pending for approval, including Vietnam - EU FTA (EVFTA) and Trans-Pacific Partnership (TPP).
According to commitment roadmaps, in the 2016 - 2020 period, tariffs specified by FTAs to which Vietnam is signatory will be slashed sharply or even removed. Tax cut roadmaps according to FTAs will affect State budget revenue in two ways. Firstly, the direct reduction is caused by lower duties on imports from other FTA members. Secondly, the indirect impact is triggered by importers’ change of importing destinations from non-FTA nations to FTA nations to enjoy tax cuts.
But, the realisation of FTA commitments also stimulated exporting and importing activities which will bring in the rise in collections of value-added tax (VAT) and special consumption tax or excise tax. Obviously, the State budget revenue from imports and imports will be substantially affected when Vietnam joins bilateral and multilateral free trade agreements. But I think that, above all, Vietnamese companies can expect to have a more open, more competitive environment and a market where products and services are cheaper but better for consumers.
There are great expectations for TPP'w impact on Vietnam's economy. Tariff barriers will be reduced or removed. Do you think Vietnam's manufacturing will certainly encounter trade protection issues when it joins TPP? What are the recommendations of the customs sector on these issues?
Chapter 6 of the Trans-Pacific Partnership (TPP) stipulates Trade Remedies, including safeguard measures, antidumping duties and countervailing duties. The General Department of Customs is an enforcement and supervisory body functioning to prevent trade fraud when Vietnam imposes trade measures to imports. In case Vietnam’s exports are investigated or subjected to trade safeguard duties, the General Department of Customs will coordinate with relevant agencies to ensure the enforcement of commitments.
Accordingly, to ensure compliance with TPP commitments, businesses must carefully analyse provisions on trade safeguard measures. In case Vietnam’s exports are suspected of being investigated for imposition of safeguard measures (such as anti-dumping duty), they must coordinate with relevant parties to provide proof to avoid being imposed wrong anti-dumping duties, causing disadvantages to Vietnam's exports. In case imports show signs of unfair competition as result of dumping which affects domestic production, they need to report such cases to authorities and provide evidence for investigation to ensure fair competition.
Besides, when other countries in the region such as China are subject to anti-dumping duty, Vietnam should avoid being used as a way for it to duck the case by transiting, illegally transhipping or outsourcing simple processes in Vietnam to gain the origin of Vietnam of its exports. This fraud will hurt Vietnam’s exports. The Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade is a lead agency of trade safeguard measures. Businesses should contact the VCA to have detailed instructions concerning trade defence measures.
What measures has the customs sector employed to deal with specialised examination which is reportedly distressing exporting and importing?
In reality, specialised inspection applied to imported and exported goods is being governed by many different and even overlapping policies. But, as one of specialised management agencies, customs authorities sympathise with difficulties that businesses are facing because of shortcomings in specialised inspection regulations.
In the coming time, to realise goals and tasks specified in Decision 2026/QD-TTg and objectives and criteria stated in Resolution 19/2016, the General Department of Customs is determined to step up the implementation of five following groups of solutions: Proposing and actively coordinating with ministries in connection with specialised examination to carry out comprehensive reforms in institutions, policies, means and methods concerning specialised examination on exports and imports according to the directions of the Prime Minister specified in Decision 2026/QD-TTg dated November 17, 2015 of the Government and the directions of the Government stated in Resolution 19-2016/NQ-CP dated April 28, 2016; Improving the quality and efficiency of centralised specialised examination locations at border gate sites where there are big flows of exports and imports to facilitate exportation and importation; Enhancing information and communication on specialised examination on exports and imports for related entities; Soon establishing and operating a cross-sector working group to carry out tasks set in Decision 2026/QD-TTg and objectives and criteria stated in Resolution 19-2016/NQ-CP; Implementing quality and food safety inspections performed by the Inspection Department under the General Department of Customs; and accelerating the deployment of the ASEAN Single Window (ASW) and the National Single Window (NSW) to realise Resolution 19-2016/NQ-CP.
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